Volkswagen says on-demand mobility services could be a part of its future - and Saudi Arabia pays $3.5 billion for a stake in Uber. Could apps pave the road with gold for a sector in need of new ideas? Hayley Platt reports.
Apps have become almost standard on most smartphones. Now Europe's biggest automaker, Volkswagen is taking an interest. Last week it announced a $300 million investment into ride-sharing company Gett. It believes the fast-growing ride-hailing market could produce 10 billion euros of sales by 2025 in Europe alone. If VW gets a share of that, it should help recoup some of the 16.2 billion euros it's set aside to cover costs from its diesel emissions scandal. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Accelerating that technological transformation of the business which diverts markets, diverts investors away from the uncomfortable litigation that is ongoing, as the amounts that they are liable for across multiple jurisdictions continues to grow." Uber the taxi hailing app also has reason to celebrate. After Saudi Arabia splashed out $3.5 billion from its sovereign wealth fund. The move signals the kingdom's decision to hedge its dependency on oil. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "The investment in this technology acts almost as an insurance policy against the fact that for a given population base you'll need less cars going forward, the more that technology transfuses itself around the global economy." It comes at a time of turmoil for the auto industry. The latest twist involving Takata - new reports saying Toyota, Fiat Chrysler, Volkswagen and Mitsubishi are still selling vehicles with its faulty air bags. The manufacturer itself has already declared millions of them defective.